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Stellar Lumens (XLM)
Basics * fka STR * Settlement network between banks, digital IOU’s * Short explanation: Super fast digital payments * Longer explanation: Stellar Lumens, the coin operated by the nonprofit Stellar Development Foundation, can be used as currency similar to Bitcoin and Ripple. The platform is built for speed and ease of use, with transactions being completed in 3–5 seconds, and fees as low as $0.01 The goal of the Stellar Development Foundation (SDF) is to act as the world’s digital payment method by connecting users all over the world with banks and payment systems. The SDF plans to “fight poverty and maximise individual potential” by delivering their services primarily in regions where citizens have low access to banks, such as in Oceania. History * XLM is a hard fork of XRP code, and Stellar’s co-founder Jed used to work for Ripple and got sued by them for violating the separation contract of when he leaved XRP. * From this reddit post: “Ripple was developed by Jed McCaleb, Arumthjr Britto, and David Schwartz. They came up with the consensus mechanism. After the launch of Ripple there was a dispute and the company opted to keep the then CEO Chris Larsen which was intolerable to Jed. Jed apparently had difficulty separating personal life from his business life and left the company. He started to tank the price of XRP by dumping his holdings onto he market sparking a legal dispute that was eventually resolved by coming to an agreement that controls the rate at which Jed can sell his XRP. In the meantime Jed forked the Ripple code to create Stellar. Jed made some adjustments to the code then his own Stellar network forked which he blamed on bad Ripple code even though the had changed the code and the same vulnerabilities were not found in the Ripple code base. Stellar sputtered for a while as he eventually divorced the wife that been the cause of some problems when he was at Ripple. Now it is widely believed, but unproven, that Jed supports the price of Stellar with the revenue from his XRP sales. Stellar also benefits from brand confusion but the companies are very different. One is professional, large, and has many established relationships, and the other (Stellar) still seems to be in the very early stages of trying to figure out what it is all about. It doesn't have the same relationships as ripple.” Token Economics * Lumens play an anti-spam role in the network. Each transaction has a fee denoted in lumens and this makes spamming the network expensive. Additionally, all accounts in the network require a minimum balance of 20 lumens (same as Ripple). * Second, lumens add liquidity to Stellar’s built-in decentralized exchange by acting as a trading bridge for low volume currency pairs. StellarX fully launched in October 2018 with zero-fee transactions. For a review of the exchange look here. Inflation Model * UPDATE (10-2019): Stellar-core v12.0.0. will "[https://github.com/stellar/stellar-core/pull/2297 end of inflation]'' as we know it" their Github is now saying they will 'disable' inflation. * Stellar has a fixed, nominal lumen inflation rate of 1% per year. There also exists a fee pool where the lumen fees for network transactions are sent. Each week, the new lumens created from inflation and the lumens from the fee pool are distributed to Stellar wallets. The amount of lumens each wallet receives is based on a voting system. Every wallet gets to vote for another wallet to receive lumens; each lumen in a wallet counts as one vote. Check out a detailed description of the lumen distribution mechanism here. * As of October 29th, 2017, there exists 103 billion lumens, with approximately 96 billion lumens held by the Stellar Development Foundation. The annual inflation rate of lumens is 1%. Update (5-11-2019): ''"The Stellar Development Foundation, the institution that manages the Stellar Lumens cryptocurrency, decided to burn more than 50% of the supply, making the price go up by double digits. The Lumens supply went from 105 billion to 50 billion in just one day, as a consequence. According to the foundation “giveaways and airdrops have diminishing effects, especially in the outsized amounts our original plan was designed to support,” so most of the coins burned were destined for these purposes." Give away attracted spammers * From CoinDesk (13-12-2019): "Stellar tried to give away 2B XLM tokens on Keybase. Then the spammers came. What was advertised to be a 2 billion XLM giveaway will now be much less. “The total giveaway amount will have been 300 million Lumens (approximately $16,000,000 USD),” Keybase wrote." Tech * Premined/Not Mineable. Stellar uses a consensus model called the Stellar Consensus Protocol (SCP). SCP is an implementation of the federated Byzantine agreement (FBA) consensus model. * Permissioned blockchain with the Stellar Consensus Protocol (SCP). * Is working on Starlight, it's own Lightning version. * From Proof of Work #77 (23-10-2019): "On Monday, 10/28, at 1600 UTC validators will vote on whether to upgrade the public network to Stellar-core v12.0.0. It has a few big changes including the introduction of a new operation that makes path payments symmetrical." ICO's * The Stellar network supports many different kinds of assets and allows anyone to issue an asset. This makes it a suitable platform for ICOs. Although there haven’t been many ICOs conducted on the Stellar network yet, this could change as Stellar comes into the cryptocurrency spotlight. * Ethereum is the largest blockchain hosting ICO tokens right now and ICOs have played a key role in driving ether’s price up over the last year. However, there is actually a strong case for companies to choose Stellar over Ethereum for ICOs. For one, the Stellar network is significantly faster and cheaper to use than Ethereum’s (e.g. 5 second vs 3.5 minute confirmation times). Faster and cheaper transactions make ICOs more accessible and more accessibility means more money raised. The Stellar network also has a built-in feature that lets developers whitelist ICO contributors. This reduces development time for ICOs that want to ensure complete legal compliance. Finally, the Stellar network’s transaction model is simpler than Ethereum’s and simplicity reduces the chances of security pitfalls. This is significant for ICOs that do not require the expressiveness provided by Turing-complete smart contracts. Network Down (2019) * Stellar was down for 2 hours “caused by being too decentralized too fast”. (16-5-2019): "Stellar network went down at 4:15 p.m. ET for nearly two hours Wednesday as enough nodes "stopped for various reasons" and the network halted. The network couldn't reach consensus and no transactions were validated in that time period. Jed McCaleb, co-founder of Stellar, told The Block: "Over the last months we have worked to get people to not depend on the SDF nodes. As of maybe a month or so ago the SDF nodes could safely go down and the network would continue. But this also means that the network can halt even if the SDF nodes are still running. Unfortunately this is what happened." The SDF nodes and the majority of validators in the network were running, according to Stellar, but they couldn't close ledgers safely because they weren't hearing from enough nodes in their quorums. Nicolas Barry, CTO of Stellar, said more information about the issues will be forthcoming "in the next few days" including the steps that Stellar is going to take to address them. Barry said: "All I can say right now is that it was caused by being too decentralized too fast and the system behaved the right way by halting." The price of Stellar lumens (XLM) is up 20% since this incident." Stellar, Waves and OmiseGo compared (23-10-2017) * “Stellar, Waves, and OmiseGo all aim to serve very similar use cases. All three platforms have native support for a decentralized exchange. All three platforms support multiple assets. Although Waves is not currently focused on micropayments, remittances, and mobile payments, Stellar and OmiseGo are both gunning for these three use cases. * From my research, it seems that Stellar comes out just slightly ahead of Waves as a multi-asset trading platform. Although Stellar is losing in terms of ICOs, Stellar has many more anchors than Waves has gateways. Most of Stellar’s anchors are operated by external companies that include large financial institutions. Waves, on the other hand, currently operates all of its gateways. Stellar is also currently much faster than Waves. Stellar supports a theoretical of maximum of 1000 transactions/second whereas Waves only supports 1.7 transactions/second. This will change as the WavesNG protocol comes online, but that’s not for another few months and even then, Waves’s maximum transaction throughput is still shy of Stellar’s 1000 transactions/second. * Stellar could give OmiseGo a run for its money. Almost everything that OmiseGo aims to do, Stellar is planning to do or is already doing it. Not to mention Stellar already has a robust, secure, and fast blockchain already running in the wild whereas OmiseGo is still a far-cry away from even launching a public testnet. At this point we have no idea what the OmiseGo blockchain will even look like. Having a functioning public blockchain also gives Stellar a headstart in business integrations. As mentioned above, a multitude of payment companies, especially in Asia and Africa, have integrated with Stellar and are already sending payments through the platform. We also can’t forgot the massive IBM and banking integration that was recently announced." Team, investors, partnerships, etc. Team * Malmi, Martti (sirius); wants to advance it through MONI * McCaleb, Jed; co-founder * Nicolas Barry, CTO * Nowotarski, Bartek; developer, has a masters in computer science from Jagiellonian University. Before joining Stellar, Bartek worked as a lead developer and security consultant, and he has found vulnerabilities in high-profile sites such as Facebook and Yahoo. * Kim, Joyce; cofounder & board member, “Joyce was a VC at Freestyle Capital and an entrepreneur. Prior to that, she was an attorney at Wilmer Hale and Sherman & Sterling and pro bono at Sanctuary for Families and the Innocence Project. Joyce graduated from Cornell University at the age of 19, followed by graduate school at Harvard and Columbia Law School. She is also a Director’s Fellow at the MIT Media Lab” * Mazieres, David; Chief Scientist, * Rabois, Keith; Board member, “has been a key player in shaping the future of money having served as a senior executive at Paypal, COO at Square and board member at Xoom, as well as being a board member at Yelp and a VP of business development at LinkedIn. Keith is an investment partner at Khosla Ventures and was an early investor in Youtube, Yammer, Palantir, Lyft, Airbnb, Eventbrite and Quora.” * 'Zack' Advisors include: * Mullenweg, Matt; advisor, “the founder and CEO of Automattic, the company behind WordPress.com. He is also a social media entrepreneur, developer, lecturer and musician. Matt is a very active angel investor, named on Forbes’ Most Influential Angel Investors on AngelList.” * Ravikant, Naval; advisor, “the CEO and a co-founder of AngelList. He previously co-founded Epinions (which went public as part of Shopping.com) and Vast.com. He is an active Angel investor, including Twitter, Uber, Yammer, Stack Overflow and Wanelo.” * Collison, Patrick; CEO of Stripe * Stein, Greg, Director at the Apache Software Foundation * Altman, Sam; President of Y Combinator Works together/is used by: * a professor of Computer Science at Stanford University, where he leads the Secure Computer Systems Group. Prof. Mazières received a BS in Computer Science from Harvard and Ph.D. in Electrical Engineering and Computer Science from MIT. His research interests include Operating Systems and Distributed Systems, with a focus on security. * Deloitte “One of the world’s largest financial consulting firms set out to innovate in the core banking space with blockchain technologies. 3 engineers, 4 weeks, and 1 Stellar integration later, Deloitte had a prototype that reduced transaction costs by 40%. Each transaction resolved in 5 seconds.”, * Tempo Money Transfer “Has a network of 190,000 locations in 120 countries”, Using the Stellar network, Tempo can power 600,000 transactions for $0.01 in fees. Tempo launched the EURT token on the Stellar network in April 2017. EURT is valued at full parity to the EUR by TEMPO and its partners. The token can be traded for PHP (Philippine Pesos), XLM (lumens), and JPY (Japanese Yen) on Stellar. The EURT is the first step by TEMPO in integrating the Stellar network as its primary payments settlement platform. * Parkway Projects “As a licensed mobile money operator, Parkway uses the Stellar network to connect Nigeria’s 5 major telcos. Parkway develops financial technology for 3,000 clients across Africa, including Ecobank, Wema Bank, and Diamond Bank. Their end-to-end financial solutions are used in 30 countries in sectors such as healthcare, education, and energy.” * IBM (who Stellar has a partnership with) and a network of South Pacific and Oceania banks have successfully deployed a cross-border payments platform that uses the Stellar network. This new Stellar-based solution allows the banks to send money in real time whereas the old process typically took days. Although the platform is currently limited to cross-border payments involving British pounds and Fiji dollars, it’s expected to scale up to 60% of all cross-border payments in the region once all seven currencies are added. IBM’s vice president of global blockchain development, Jesse Lund, has cautioned that the use lumens as an exchange bridge between currencies is temporary but this doesn’t mean that the Stellar network will not continue to be used. * NGO’s; Praekelt Foundation, philafy and bext360 https://www.stellar.org/how-it-works/powered-by-stellar/ * More partners: https://www.stellar.org/about/directory * Stellar Development Foundation partnered with Blockchain.com to distribute $125M in Stellar lumens, nearly half a billion tokens, to Blockchain.com wallet holders who sign up for the airdrop; this makes Stellar the first partner for Blockchain's airdrop program and guiding framework announced in 7-2018. Investors * Is one of the investments chosen by Grayscale, owned by DCG (Grayscale also owns 1% of the BTC supply) * Big corporate donors: Stripe, Google, and BlackRock. Category:Coins/Tokens